Of all the dire numbers that Tory MPs have been confronted with this week, one has stuck in their mind: 17. It’s the size of Labour’s poll lead, according to the latest YouGov poll. It’s sparked panic in the cabinet and among MPs. One minister with a majority of more than 10,000 frets that they would lose their seat with these numbers. What worries them even more is that this poll was taken before the full economic fallout from the mini-budget became clear. What will the numbers be once homeowners have realised what rising interest rates mean for their mortgage payments?
The difference between this situation and the scandals that dominated Boris Johnson’s government is that it will have immediate and painful consequences for swaths of voters. “It goes well beyond Westminster,” says a MP from the 2015 intake. Tory MPs report calls from constituents they rarely hear from who are worried they will not be able to pay their mortgage. “They’ve broken the economy and the party,” argues a former minister who backed Rishi Sunak.
Homeowners are the bedrock of the Tory voter coalition – once someone owns property, they are more likely to vote Conservative. One of the reasons why the “red wall” turned blue was rising rates of homeownership there. It means MPs from across the party worry that they have just made their base poorer.
The scenes of optimism at Labour conference this week have only served to further worsen the mood in the Tory party. “Everyone can see Labour have got their tails up, and that is worrying,” says a senior Conservative. One Truss optimist makes the case to a colleague that the positive of the mini-budget was that it had eclipsed Labour’s annual meeting. It doesn’t convince the Tory MP in question. “I’m not sure a financial crisis is worth people not paying much attention to what Starmer is saying,” they say wryly.
The view among MPs in the centre of the Tory party is that for the first time since the global financial crisis, it’s Labour that has the economic and political advantage. That sentiment will only grow with each poll. “Lots of mainstream Conservative voters are very concerned,” says one MP.
It means that less than a month into her premiership, Truss is in a weakened position and draining political capital. “She has no good options,” says a minister of the current turmoil. “I’ve never seen someone waste so much so quickly,” says one MP.
The mood in the parliamentary party is worsening. The WhatsApp groups are showing tentative signs of MP revolts. The One Nation group of Tories is seeing red on fracking. The Conservative Environment Network has concerns over the direction of Truss’s government. Supporters of Sunak have been venting to one another that their warnings went unheard.
Ultimately, Truss has both an economic problem and a political one. In order to try to calm the markets, she and her chancellor, Kwasi Kwarteng, must point to how they plan to reduce the deficit, which could involve spending cuts and details of supply-side reform that ought to boost growth. But on the political side, cuts or shortages in funding will prove unpopular with MPs – and supply-side reform will require tricky votes where you need the party to be on side.
While there is some animated talk of no-confidence letters going in, more MPs still take the view it would be truly kamikaze to oust another leader so soon, and instead want to try to improve the situation. “I genuinely don’t think Tory MPs are organising to do anything drastic, most are in a state of quiet shock,” says a member of the 2010 intake. “She needs to not look like a toxic bomb that the Conservatives are carrying.”
Inside Downing Street, aides insist there is no panic. “We are determined,” insists one close Truss supporter. But there is a nervousness as to how others are responding. “We need to have a good conference,” admits an aide. There is a belated realisation among Truss supporters that parts of the mini-budget have backfired. It’s fuelling concerns that No 10 is understaffed, and the prime minister needs a wider circle of aides and ministers involved in decision-making.
But, as for the next steps, there is little consensus. If Truss changes tack so early in her premiership, it will serve as an admission that she got it wrong. Given the prime minister also genuinely believes her plan will lead to growth, she will be very reluctant to move away from her tax cuts, which formed a key part of her leadership pitch on which she was elected by the party membership.
Some MPs are calling for Kwarteng to go. However, Truss is very unlikely to agree. One MP says if not Kwarteng then his deputy Chris Philp, chief secretary to the Treasury, ought to be moved in due course. But this is Truss’s economic strategy, so such moves may not reassure the markets in the way MPs hope.
It’s why support is growing among MPs for Truss to – at the very least – delay her plan to abolish the 45% tax rate for top earners. It’s seen as politically toxic, particularly in the face of difficult spending decisions and demands from public sector workers for pay rises. “The most elegant route is to delay a lot of these measures,” says a senior Tory. A Tory MP complains: “It’s bad politics. We are kicking sand in people’s faces.” The former chief whip Julian Smith has been the first to come out publicly to say changes to the growth plan are needed.
The hope in Truss’s team had been that the party conference would be a chance for her to establish her premiership and set out her vision. Both Boris Johnson and Sunak are due to stay away. Now it will be an exercise in damage limitation. Already, MPs are talking about the need for a reset. Yet there are concerns that conference could encourage her government to continue with its radicalism. “All the true believers will be there while a lot of the sensibles are keeping away,” says one MP who will attend. “If you think John Redwood is the voice of Britain, you have a problem.”
“She should be thinking of all the ways she can delay the moment where things start to crystallise,” says a senior Tory, suggesting Truss still has time to change course. If she doesn’t, her premiership looks set to be dominated by internal rows, negative polls and tricky decisions. “If you’d asked me on Friday if a different politician would lead us into the next election, I would have said not in a million years,” says an MP who backed Sunak. “Now I think there is a 40% chance.”
During the leadership campaign, Truss declared that there would be “no handouts” to deal with rising energy bills. It was the ideologically pure answer. But, as office loomed, Truss decided this position was unsustainable and that if not dealt with, the issue could consume her premiership before it had really begun. She backtracked, and instead came forward with a plan to cap energy prices, at great cost to the public purse. The question is, will Truss’s pragmatism now kick in again, or will she push on with her plans regardless?
Katy Balls is the Spectator’s deputy political editor